Are you planning for buying property from an NRI? Watch out for some classic mistakes you can make while buying. Learn about what, how and why we make these common mistakes, how you can avoid making them again, and our tips recommendations on what you can do alternatively to make it smooth.
Mistakes while buying Property from an NRI
- SPOA: It is advisable that during the sale, the NRI seller should be physically present in India. If it is not possible, a Special Power of Attorney (SPOA, a relative of the NRI) holder can execute multi-tasks like authorization to carry out any financial transaction in India. The SPOA should specify property details, including the presence of government ID cards while buying property. There can be multiple possibilities like the intent of fraud, avoid TDS, family dispute, etc. By following strict guidelines and pay to NRI’s bank account only. SPOA holder is just a representative and financials should be dealt with the NRI directly.
- TDS and Value: The most common mistake done by the buyer is while calculating TDS Percentage & the Value on which TDS. So understanding this might take a while so, we advise you to hire professionals like us to unto date on the taxes and calculations.
- Citizenship and Residency Status: It is necessary to do a background check mainly citizenship. Govt of India does not allow dual citizenship, therefore, it is wise to get clarity on the same. It is best to include relevant clauses in the sale deed to safeguard the financial interests.
- TAN: Under section 195, TDS can be deducted only after obtaining the TAN number. If a buyer fails to deduct TDS or deduct TDS without TAN, then penalties will be applicable. Therefore, all buyers require TAN and never forget it.
- Joint Sellers: It’s important to know that if both sellers are NRI, then one of them cannot receive payment on behalf of others. Both NRI’s should get a fair share of it even if they turn out to be a couple.
I hope these points help you and for any doubt or to buy Property contact OwnersTown.